Aramco, the United States, and Saudi Arabia: A Study of the Dynamics of Foreign Oil Policy, 1933-1950 PDF
Preview Aramco, the United States, and Saudi Arabia: A Study of the Dynamics of Foreign Oil Policy, 1933-1950
ARAMCO, THE UNITED STATES, AND SAUDI ARABIA ARAMCO THE UNITED STATES AND SAUDI ARABIA A Study of the Dynamics of Foreign Oil Policy 1933-1950 IRVINE H. ANDERSON PRINCETON UNIVERSITY PRESS PRINCETON, NEW JERSEY Copyright © 1981 by Princeton University Press Published by Princeton University Press, Princeton, New Jersey In the United Kingdom: Princeton University Press, Guildford, Surrey All Rights Reserved Library of Congress Cataloging in Publication Data will be found on the last printed page of this book This book has been composed in Linotron Times Roman Clothbound editions of Princeton University Press books are printed on acid-free paper, and binding materials are chosen for strength and durability Printed in the United States of America by Princeton University Press, Princeton, New Jersey To Donna and Mary CONTENTS Preface ix List of Tables xiv Abbreviations xv I In the Middle Eastern Labyrinth 3 II Strategic Planners 35 III Diplomats 68 IV Field Personnel 108 V And Corporate Officers 124 VI Form a Coalition 160 Conclusions 198 Appendices A Methodological Note 208 B Texts of Anglo-American Petroleum Agreement, 1943, 1944, and 1945 216 C Crude Positions of Jersey, Socony-Vacuum, Socal, and The Texas Company, 1933-1950 229 Essay on Sources 235 Selected Bibliography 237 Index 253 PREFACE ON MAY 29, 1933, Lloyd N. Hamilton of the Standard Oil Com pany of California and 'Abd Allah Al Sulaiman Al Hamdan, finance minister of Saudi Arabia, signed an agreement giving Socal exclusive rights to extract petroleum from an area larger than the state of Texas, in return for a small cash payment and royalties on future production of 4 shillings per ton (about $. 10 a barrel in 1933). The agreement went virtually unnoticed in the rest of the world because almost no one—including experts from the other major oil companies and King 'Abd al-'Aziz ibn 'Abd al-Rahman Al Faisal Al Sa'ud himself—believed that there was oil in the newly formed kingdom of Saudi Arabia. The United States did not even have a consul—much less a diplomatic rep resentative—in the country at the time. Only a handful of Socal geologists were convinced that oil was there, but events proved them to be right a thousand times over. In 1936 Socal formed a partnership with The Texas Company to market Saudi oil, and responsibility for production was given to a joint subsidiary—later renamed the Arabian American Oil Company, Aramco. By 1941 test wells had begun to reveal the extent of reserves that had been tapped into, but at that point the American government still had little interest. For years the United States had been a net exporter of petroleum, and to many people this appeared to be the natural order of things. In the midst of World War II, however, government planners came face to face with stark predictions that the United States would become a net importer after the war, and they were jolted into attempts to assure continuing American access to Saudi oil and rapid development of Saudi reserves to help conserve those in the Western Hemisphere. Through a Petroleum Reserves Cor poration (PRC) created expressly for the purpose, Secretary of the Interior Harold L. Ickes tried to buy a controlling interest in the
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